Mexico's Pena Nieto confirmed president-elect, rival defiant

Lizbeth Diaz

MEXICO CITY (Reuters) - Mexico's electoral tribunal confirmed Enrique Pena Nieto as president-elect on Friday, but his rival refused to accept defeat and held out the possibility of further protests that could hamper reform efforts.

The tribunal threw out an attempt to overturn the election result by leftist leader Andres Manuel Lopez Obrador, who had accused Pena Nieto of laundering money and buying votes in the July election.

Centrist Pena Nieto, 46, will be sworn in on December 1 and has pledged a raft of fiscal, labor and energy reforms, which Lopez Obrador is likely to resist.

"It's time to start a new chapter of responsible work for Mexico and unity," Pena Nieto said in an address at the court following the ruling. "Let's work together for the reforms that Mexico needs."

He said he would announce his transition team in the coming days and would set out reforms aiming to improve governmental transparency and battle corruption in the weeks ahead.

Lopez Obrador, whose supporters blocked many of Mexico City's main thoroughfares for weeks after he narrowly lost the 2006 election, rejected the judges' decision.

"I cannot accept the tribunal's ruling, which has declared the presidential election valid," he told reporters, calling for a rally in Mexico City's main square on September 9.

"Then we will determine what happens next."

Lopez Obrador did not specify the steps he was considering but his words recalled the disruptive protests of 2006.

"Civil disobedience is an honorable duty when directed against the thieves of the hope and happiness of the people," the silver-haired 58-year-old said.

A former mayor of Mexico City, Lopez Obrador accused Pena Nieto and his Institutional Revolutionary Party (PRI) of buying 5 million votes with illegal funding and plying voters with presents ranging from supermarket gift cards to fertilizer, cement and livestock.

The delay in endorsing the July 1 election result has meant Pena Nieto has had to hold back on his plans to cut deals in Congress over economic reforms which analysts say are vital to boosting growth in Latin America's No. 2 economy.

THORN IN SIDE

Pena Nieto plans to make changes to the labor market, the tax system and state oil monopoly Pemex, which he hopes will help boost economic growth to about 6 percent a year.

But the planned measures stray into sensitive territory for many Mexicans, including members of the PRI, whose early years in power in the 1930s were marked by socialist policies including the nationalization of the oil industry in 1938.

Pena Nieto wants to encourage more private investment in Pemex, which became a symbol of Mexican self-sufficiency, and soften labor laws. He is also expected to review extending a sales tax to food and medicine, a measure the PRI has blocked in the past because it is seen as raising the burden on the poor.

Far-reaching changes on oil and taxes face strong opposition from the left, and could be resisted by leftists within the PRI, and Pena Nieto will be keen to avoid big street protests after his bruising road to securing presidential legitimacy.

As a result, those reforms will probably have to wait until he is firmly installed in the presidential palace. Pena Nieto also knows he will have to reach out to opponents on reforms after the PRI fell short of an outright majority in Congress.

Jorge Chabat, professor of international studies at the Center for Research and Teaching in Economics (CIDE) in Mexico City, expects Pena Nieto to be able to push reforms through, but says Lopez Obrador will be a thorn in his side.

"He will make his life difficult," Chabat said. "Pena Nieto will also have to negotiate with the PRI. That complicates everything."

"The problem will be outside Congress too, because even if the reforms are approved, the moment they are carried out there will be marches and protests, perhaps roadblocks and even violence, and that carries a political cost for any government."

Following the court ruling, Mexican employers' federation Coparmex called on Pena Nieto to make good on his campaign pledges, and said it would reject any attempt to foment unrest.

Nomura analyst Benito Berber said he did not expect mass protests, 2006-style, given that Lopez Obrador had so far taken a more moderate tone than at the last election.

The tribunal ruling would help to ease concerns about the legitimacy of the PRI victory but did not mean an automatic green light for wholesale reform, given Pena Nieto's plans to first address corruption and clean government, he added.

"The coming weeks will be key for the outlook for reforms because Pena Nieto will likely name his cabinet (sometime in November) and establish the priorities for the reform agenda," Berber said in a note to clients.